bernstein litowitz berger & grossmann … · 2018-04-26 · court-appointed lead counsel,...

LEAD COUNSEL’S MOTION FOR AN AWARD OF

ATTORNEYS’ FEES AND LITIGATION EXPENSES

CASE NO. 8:14-CV-02004-DOC (KESX)

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BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP RICHARD D. GLUCK (Bar No. 151675) [email protected] 12481 High Bluff Drive, Suite 300 San Diego, CA 92130 Telephone: (858) 793-0070 Facsimile: (858) 793-0323

-and-

KESSLER TOPAZ MELTZER & CHECK, LLP ELI R. GREENSTEIN (Bar No. 217945) [email protected] One Sansome Street, Suite 1850 San Francisco, CA 94104 Telephone: (415) 400-3000 Facsimile: (415) 400-3001

Counsel for Class Representatives

[Additional counsel on signature page]

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

SOUTHERN DIVISION

IN RE ALLERGAN, INC. PROXY VIOLATION SECURITIES LITIGATION

Case No. 8:14-CV-02004-DOC-KESX

CLASS ACTION

LEAD COUNSEL’S NOTICE OF MOTION AND MOTION FOR AN AWARD OF ATTORNEYS’ FEES AND REIMBURSEMENT OF LITIGATION EXPENSES; AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT

Hearing Date: May 30, 2018 Time: 7:30 a.m. Courtroom: 9D (Santa Ana) Judge: Hon. David O. Carter

Case 8:14-cv-02004-DOC-KES Document 618 Filed 04/26/18 of 36 Page ID #:78143




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NOTICE OF MOTION AND MOTION

TO THE COURT, ALL PARTIES, AND THEIR ATTORNEYS OF RECORD:

PLEASE TAKE NOTICE that on May 30, 2018 at 7:30 a.m., in Courtroom

9D of the United States District Court for the Central District of California, Ronald

Reagan Federal Building and United States Courthouse, 411 West Fourth Street,

Santa Ana, CA 92701, the Honorable David O. Carter presiding, Lead Counsel

Bernstein Litowitz Berger & Grossmann LLP (“BLB&G”) and Kessler Topaz

Meltzer & Check, LLP (“KTMC”) (collectively, “Lead Counsel”), counsel for Court-

appointed class representatives the State Teachers Retirement System of Ohio (“Ohio

STRS”), Iowa Public Employees Retirement System (“Iowa PERS”) and Patrick T.

Johnson (collectively, “Plaintiffs”) and the Class, will and hereby do move, pursuant

to Rule 23(h) of the Federal Rules of Civil Procedure, for an Order granting an award

of attorneys’ fees and reimbursement of litigation expenses in the above-captioned

securities class action.

This motion is made pursuant to the Court’s March 19, 2018 Order

Preliminarily Approving Proposed Settlement and Providing for Notice (ECF No.

614) (“Preliminary Approval Order”) and is based on (i) this Notice of Motion; (ii)

the supporting Memorandum of Points and Authorities in Support set forth below;

(iii) the accompanying Joint Declaration of Mark Lebovitch and Lee Rudy in Support

of (I) Plaintiffs’ Motion for Final Approval of the Proposed Settlement and Plan of

Allocation and (II) Lead Counsel’s Motion for Award of Attorneys’ Fees and

Reimbursement of Litigation Expenses, and the exhibits attached thereto; (iv) the

pleadings and records on file in this action; and (v) other such matters and argument

as the Court may consider at the hearing of this motion.

Lead Counsel are not aware of any opposition to the motion. Pursuant to the

Preliminary Approval Order, any objection to the request for attorneys’ fees and

reimbursement of Litigation Expenses must be filed on or before May 9, 2018. To





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date, no objections have been filed. A proposed Order will be submitted with Lead

Counsel’s reply brief, which will be filed on May 23, 2018, after the deadline for

objections has passed.





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TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ..................................................................................... ii

MEMORANDUM OF POINTS AND AUTHORITIES .......................................... 1

I. INTRODUCTION ........................................................................................... 1

II. OVERVIEW OF LEAD COUNSEL’S WORK AND THE RISKS FACED IN THIS ACTION ............................................................................ 4

A. Lead Counsel Devoted Significant Time And Effort To This Case ............................................................................................... 4

B. The Case Faced Enormous Risks .......................................................... 5

C. The $250 Million Settlement Is An Excellent Result ........................... 6

III. THE REQUESTED FEE AWARD IS REASONABLE AND SHOULD BE APPROVED ............................................................................ 6

A. Lead Counsel Are Entitled To An Award Of Attorneys’ Fees From The Common Fund ............................................................. 6

B. The Requested Attorneys’ Fees Are Reasonable Under the Percentage Method ................................................................................ 8

C. The Requested Attorneys’ Fees Are Reasonable Under the Lodestar Method ................................................................................. 10

IV. ALL OTHER FACTORS CONSIDERED BY NINTH CIRCUIT COURTS SUPPORT APPROVAL OF THE REQUESTED FEE ............... 13

A. The Results That Lead Counsel Achieved In The Face Of Significant Risks Support The Requested Fee ............................................................................................. 13

i. The Work Performed And Results Achieved ................ 13

ii. The Case Faced Serious Risks ....................................... 14

B. The Skill Required And Quality Of Lead Counsel’s Work Performed Support The Requested Fee .......................... 17

C. The Contingent Nature Of The Fee And The Financial Burden Carried By Lead Counsel Support The Requested Fee .................................................................... 18

D. The Requested Fee Is Consistent With Or Less Than Awards Made In Similar Cases On A Percentage or Lodestar Multiplier Basis ......................................................... 19





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E. The Reaction Of The Class Supports The Requested Fee ............................................................................................. 19

V. PLAINTIFFS’ COUNSEL’S LITIGATION EXPENSES ARE REASONABLE ............................................................................................ 21

VI. PLAINTIFFS SHOULD BE AWARDED THEIR REASONABLE COSTS AND EXPENSES UNDER 15 U.S.C. §78u-4(a)(4)................................................................................................... 24

VII. CONCLUSION ............................................................................................. 25





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TABLE OF AUTHORITIES

Page(s) CASES

In re American Apparel, Inc. Shareholder Litig., 2014 WL 10212865 (C.D. Cal. July 28, 2014) .................................................... 8

In re Amgen Inc. Sec. Litig., 2016 WL 10571773 (C.D. Cal. Oct. 25, 2016) ............................................ 10, 12

In re Apollo Group Inc. Sec. Litig., 2012 WL 1378677 (D. Ariz. Apr. 20, 2012) ........................................................ 9

In re Bank of America Corp. Sec. Litig., 772 F.3d 125 (2d Cir. 2014) ............................................................................... 24

In re Bank of New York Mellon Corp. Forex Transactions Litig., 148 F. Supp. 3d 303 (S.D.N.Y. 2015) .................................................................. 9

Barbosa v. Cargill Meat Solutions Corp., 297 F.R.D. 431 (E.D. Cal. 2013) ........................................................................ 18

Board of Trustees of AFTRA Ret. Fund v. JPMorgan Chase Bank, N.A., 2012 WL 2064907 (S.D.N.Y. June 7, 2012) ........................................................ 9

Boeing Co. v. Van Gemert, 444 U.S. 472 (1980) ............................................................................................. 6

In re Broadcom Corp. Sec. Litig., 2005 WL 8153006 (C.D. Cal. Sept. 12, 2005) ..................................................... 9

In re Brocade Sec. Litig., No. 05-2042, slip op. (N.D. Cal. Jan. 26, 2009), ECF No. 496 ........................... 9

In re Cendant Corp. Sec. Litig., 404 F.3d 173 (3d Cir. 2005) ............................................................................... 21

In re CMS Energy Sec. Litig., 2007 WL 9611274 (E.D. Mich. Sept. 6, 2007) .................................................... 9

In re Comverse Tech., Inc., Sec. Litig., 2010 WL 2653354 (E.D.N.Y. June 24, 2010) ............................................... 9, 12





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In re CV Therapeutics, Inc., Sec. Litig., 2007 WL 1033478 (N.D. Cal. Apr. 4, 2007) ..................................................... 24

In re DaimlerChrysler AG Sec. Litig., No. 00-0993 (KAJ), slip op. (D. Del. Feb. 5, 2004), ECF No. 971 ................... 10

In re Deutsche Telekom AG Sec. Litig., No. 00-CV-9475 (NRB), 2005 WL 7984326 (S.D.N.Y. June 9, 2005) ............ 10

In re Dynamic Random Access Memory (DRAM) Antitrust Litig., 2007 WL 2416513 (N.D. Cal. Aug. 16, 2007) ................................................... 18

Ellison v. Steven Madden, Ltd., 2013 WL 12124432 (C.D. Cal. May 7, 2013) ..................................................... 7

Fischel v. Equitable Life Assurance Societyy, 307 F.3d 997 (9th Cir. 2002) .......................................................................... 8, 16

In re Flag Telecom Holdings, Ltd. Sec. Litig., 2010 WL 4537550 (S.D.N.Y. Nov. 8, 2010) ............................................... 12, 24

Florin v. Nationsbank of Georgia, N.A., 34 F.3d 560 (7th Cir. 1994) ................................................................................ 16

In re Genworth Fin. Sec. Litig., 2016 WL 7187290 (E.D. Va. Sept. 26, 2016) ...................................................... 9

HCL Partners Ltd. Partnership v. Leap Wireless Int’l, Inc., 2010 WL 4156342 (S.D. Cal. Oct. 15, 2010)............................................... 10, 11

In re Heritage Bond Litig., 2005 WL 1594389 (C.D. Cal. June 10, 2005) ....................................... 15, 17, 21

In re Heritage Bond Litig., 2005 WL 1594403 (C.D. Cal. June 10, 2005) ..................................................... 8

Hopkins v. Stryker Sales Corp., 2013 WL 496358 (N.D. Cal. Feb. 6, 2013) ........................................................ 11

In re Initial Pub. Offering Sec. Litig., 671 F. Supp. 2d 467 (S.D.N.Y. 2009) ................................................................ 12





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Knight v. Red Door Salons, Inc., 2009 WL 248367 (N.D. Cal. Feb. 2, 2009) ............................................ 19, 22, 23

In re Marsh & McLennan Cos. Sec. Litig., 2009 WL 5178546 (S.D.N.Y. Dec. 23, 2009) .................................................... 24

In re Merck & Co., Inc. Vytorin/Zetia Sec. Litig., 2013 WL 5505744 (D.N.J. Oct. 1, 2013) ............................................................. 9

In re Mercury Interactive Corp. Sec. Litig., 2011 WL 826797 (N.D. Cal. Mar. 3, 2011) ......................................................... 9

Missouri v. Jenkins, 491 U.S. 274 (1989) ........................................................................................... 11

NECA-IBEW Health & Welfare Fund v. Goldman, Sachs & Co., 2016 WL 3369534 (S.D.N.Y. May 2, 2016) ........................................................ 9

In re Nuvelo, Inc. Sec. Litig., 2011 WL 2650592 (N.D. Cal. July 6, 2011) ................................................ 18, 19

In re Omnivision Techs., Inc., 559 F. Supp. 2d 1036 (N.D. Cal. 2008) ...................................................... passim

Paul, Johnson, Alston & Hunt v. Graulty, 886 F.2d 268 (9th Cir. 1989) ................................................................................ 8

Powers v. Eichen, 229 F.3d 1249 (9th Cir. 2000) .............................................................................. 7

Schuh v. HCA Holdings Inc., No. 3:11-cv-01033, slip op. (M.D. Tenn. Apr. 14, 2016), ECF No. 563 ........................................................................................................................ 9

Silverman v. Motorola, Inc., 2012 WL 1597388 (N.D. Ill. May 7, 2012), aff’d, 739 F.3d 956 (7th Cir. 2013) ...................................................................... 9

Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007) ............................................................................................. 7

Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370 (9th Cir. 1993) .................................................................................. 8





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Vincent v. Reser, 2013 WL 621865 (N.D. Cal. Feb. 19, 2013) ...................................................... 22

Vinh Nguyen v. Radient Pharm. Corp., 2014 WL 1802293 (C.D. Cal. May 6, 2014).................................................... 7, 8

Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) .............................................................. 7, 8, 11, 13

In re Washington Mut., Inc. Sec. Litig., 2011 WL 8190466 (W.D. Wash. Nov. 4, 2011) .................................................. 8

In re Washington Pub. Power Supply Sys. Sec. Litig., 19 F.3d 1291 (9th Cir. 1994) ....................................................................... passim

In re Williams Sec. Litig., No. 02-cv-72-SPF, slip op. (N.D. Okla. Feb. 12, 2007), ECF No. 1638 .................................................................................................................... 10

Woburn Ret. Sys. v. Salix Pharms. Ltd., 2017 WL 3579892 (S.D.N.Y. Aug. 18, 2017) ..................................................... 9

STATUTES

15 U.S.C. §78u-4(A)(4) ........................................................................................... 24

15 U.S.C. §78u-4(A)(6) ............................................................................................. 7





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MEMORANDUM OF POINTS AND AUTHORITIES

Court-appointed Lead Counsel, Bernstein Litowitz Berger & Grossmann LLP

(“BLB&G”) and Kessler Topaz Meltzer & Check, LLP (“KTMC”) (collectively,

“Lead Counsel”), having achieved a Settlement providing for a recovery of

$250,000,000 in cash for the benefit of the Class, respectfully submit this

memorandum in support of their motion for an award of attorneys’ fees in the amount

of 21% of the Settlement Fund.1 Lead Counsel also seek reimbursement of

$6,333,235.10 in litigation expenses that were reasonably and necessarily incurred by

Plaintiffs’ Counsel in prosecuting and resolving the Action, which includes proposed

awards pursuant to the Private Securities Litigation Reform Act of 1995 (“PSLRA”)

for costs and expenses incurred by Plaintiffs directly related to their representation of

the Class in the total amount of $128,126.98.

I. INTRODUCTION

This case epitomized high-stakes litigation. The legal issues were important

and novel, as they arose from one of the most high-profile business transactions of

2014 and they implicated a rarely enforced law that had not been the subject of

extensive judicial interpretation. Lead Counsel represented a class of stock sellers

that had to overcome a virtually endless flow of serious risks to prevailing on its

claims. Plus, the deep-pocketed Defendants hired an army of lawyers from no less

than four top, nationwide law firms, who litigated this case in the most aggressive

1 Unless otherwise noted, capitalized terms have the meanings set forth in the Stipulation and Agreement of Settlement dated January 26, 2018 (ECF No. 606) (the “Stipulation”) or the Joint Declaration of Mark Lebovitch and Lee Rudy in Support of (I) Plaintiffs’ Motion for Final Approval of the Proposed Settlement and Plan of Allocation and (II) Lead Counsel’s Motion for Award of Attorneys’ Fees and Reimbursement of Litigation Expenses (the “Joint Declaration” or “Joint Decl.”), filed herewith. Citations to “¶ __” in this memorandum refer to paragraphs in the Joint Declaration.





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manner possible. To overcome each of these challenges, Lead Counsel completely

committed themselves to prosecuting this Action for more than three years, devoting

significant time, effort and money to proving the Class’s claims.

Through skill and persistence, Lead Counsel overcame many hurdles. They

defeated three motions to dismiss, obtained certification of a seller class, fought off

Defendants’ Rule 23(f) petition and amassed a compelling evidentiary record in

support of the Class’s claims – one that justified a rare affirmative summary

judgment motion on Defendants’ liability. But victory at trial – or on a subsequent

appeal – remained far from certain. To the contrary, despite prior successes, the

Class and Lead Counsel faced a significant chance of zero recovery.

As explained herein, the enormous amount of quality legal work that Lead

Counsel dedicated to the prosecution of this Action – and the significant risk that they

took on by prosecuting and funding this litigation for three years with no guarantee of

recovery – justifies a fee of 21% of the proposed $250 million Settlement Fund.2 As

discussed below, this request is (a) below the 25% “benchmark” for percentage

attorneys’ fee awards in the Ninth Circuit; (b) consistent with fee awards in other

securities class actions; and (c) a fractional or “negative” multiplier of 0.8 when

analyzed under the lodestar methodology. This means that, despite the substantial

contingency risks that counsel faced in the Action (which would justify a substantial

positive multiplier on their lodestar), Lead Counsel here are requesting a fee equal to

only 80% of the value of the time they devoted to the case.

Plaintiffs, which include two sophisticated institutional investors, Ohio STRS

and Iowa PERS, and an individual investor with a substantial financial stake in the

Action, evaluated Lead Counsel’s application for fees and expenses and have

2 This amount reflects 21% of the $250 million Settlement Amount, plus interest thereon at the same rate as earned by the Settlement Fund.





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endorsed it as fair and reasonable. See Declaration of William J. Neville for Ohio

STRS (Joint Decl. Ex. 5) (“Neville Decl.”), at ¶¶ 10-12; Declaration of Gregg

Schochenmaier for Iowa PERS (Joint Decl. Ex. 6) (“Schochenmaier Decl.”), at ¶¶ 10-

12; Declaration of Patrick T. Johnson (Joint Decl. Ex. 7) (“Johnson Decl.”), at ¶8.

Pursuant to the Court’s Preliminary Approval Order, more than 61,000 copies

of the Settlement Notice have been mailed to potential Class Members and nominees.

See Affidavit of Jose C. Fraga Regarding (A) Mailing of the Settlement Notice and

Claim Form and (B) Publication of the Summary Settlement Notice (“Fraga Aff.”), at

¶¶3-8. The Settlement Notice advised Class Members that Lead Counsel would seek

attorneys’ fees on behalf of all Plaintiffs’ Counsel in an amount not to exceed 25% of

the Settlement Fund, and reimbursement of Litigation Expenses in an amount not to

exceed $8.5 million, see Fraga Aff., Ex. A, at ¶¶5, 63. The Settlement Notice also

advises Class Members that they could object to the request for attorneys’ fees and

expenses until May 9, 2018. Id. at p. 2, ¶¶66-69. While the deadline set by the Court

for Class Members to object has not yet passed, to date, no objections to the amount

of attorneys’ fees and expenses set forth in the Settlement Notice have been received.

Joint Decl. ¶189.

Lead Counsel also respectfully submit that the expenses for which they seek

reimbursement were reasonable and necessary for the successful prosecution of the

Action – and that the requests for awards to Plaintiffs pursuant to the PSLRA for the

time that they dedicated to the Action on behalf of the Class are likewise reasonable

and appropriate.

For the reasons set forth herein, Lead Counsel respectfully submit that their fee

and expense motion should be granted in full.





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II. OVERVIEW OF LEAD COUNSEL’S WORK AND THE RISKS FACED IN THIS ACTION

A. Lead Counsel Devoted Significant Time And Effort To This Case

Lead Counsel’s efforts began in 2014 with a detailed investigation into the

facts surrounding Valeant’s attempt to takeover Allergan and the inside trading

claims that the Court had previously assessed on a limited evidentiary record. Those

efforts continued for more than three years, through two detailed amended complaints

as well as vigorously opposed class certification and summary judgment motions. In

fact, by the time the Settlement was reached, Lead Counsel had engaged in

significant preparation for trial.

As set forth in the Joint Declaration, discovery in this case was fiercely

litigated and required significant resources, and virtually every issue was contested.

¶¶11, 58-111. For example, Lead Counsel litigated more than 40 discovery-related

motions before the Court-appointed Special Masters. ¶¶85-91. While seeking to be

as efficient as possible, Lead Counsel had to ensure that they devoted the necessary

resources to meeting their adversaries’ litigation strategy and perform at the high

level of skill and quality of work that the Class deserved, and the Court expected.

In the end, Lead Counsel took or defended over 70 depositions, obtained and

analyzed over 1.5 million pages of productions from Defendants and third parties,

issued over 100 document requests and 25 interrogatories and over 500 requests for

admission on Defendants and over 30 subpoenas on third parties. ¶¶60, 67, 81, 84.

Lead Counsel also reviewed and produced over 800,000 pages of discovery from

Plaintiffs and their representatives. ¶47. The parties hired and produced reports from

no less than fourteen experts – and then deposed or defended the depositions of each

of those experts. ¶¶92-110. Through these considerable efforts, Lead Counsel

developed an extensive evidentiary record that allowed them to present a compelling

case for summary judgment on liability – and oppose Defendants’ cross-motions for





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summary judgment. Lead Counsel and Plaintiffs were also able to use this

evidentiary record in settlement negotiations – which spanned more than a year and

involved written submissions and extensive negotiations among counsel and the

experienced mediators.

Lead Counsel respectfully submit that the Court is well positioned to assess

Lead Counsel’s efforts here based on its direct experience during the Action. The

Court and its Special Masters saw Lead Counsel perform through the scores of briefs

and court appearances made in connection with the forty discovery motions, three

rounds of motions to dismiss, class certification and summary judgment.

B. The Case Faced Enormous Risks

Lead Counsel’s efforts were undertaken without compensation and in the face

of truly substantial risks that they could be left with no recovery at all. Indeed, the

accompanying Joint Declaration and Settlement Memorandum discuss the substantial

risks that Plaintiffs faced in establishing liability and damages. See Joint Decl.

¶¶154-172; Settlement Memorandum at 9-12.

Among other things, Plaintiffs faced a significant risk at trial that: a jury

would by unsympathetic to the seller Class at issue here; Plaintiffs would not be able

to establish that Pershing’s trading “related to” a tender offer; Valeant would succeed

in convincing a jury that no decision to launch a tender offer was made until after

Pershing’s trading or that its conduct was legitimate because it had been approved by

sophisticated law firms and the SEC took no action against Defendants. Even if

Plaintiffs convinced a unanimous jury to find Defendants liable for Rule 14e-3

violations, Defendants could still have blocked any recovery by convincing the jury

to award far smaller damages, or no damages at all. See Joint Decl. ¶¶164-170;

Settlement Memorandum at 10-11.

While these risks were serious when the Settlement was reached, they were

even more so at the outset of the case – an important consideration when assessing





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the reasonableness of a fee request. When the case began, Lead Counsel risked a loss

on each element of liability, including on “offering person,” substantial steps, and

contemporaneous trading – especially given the paucity of case law interpreting Rule

14e-3 – as well as the risk that a seller class might not get certified. Lead Counsel

faced the risk that the Court or an appellate court might have found that there was no

private cause of action under Rule 14e-3 for Defendants’ alleged warehousing

scheme. Lead Counsel assumed these risks in litigating this Action on a fully

contingent basis.

C. The $250 Million Settlement Is An Excellent Result

In light of the risks to any recovery, Lead Counsel believe that the $250

million cash Settlement is an excellent result for the Class. Defendants adamantly

insisted that Plaintiffs and the Class were entitled to zero recovery and, even

assuming liability, the maximum damages that could likely be established were $1

billion. The Settlement represents 25% of total recoverable damages if they are

limited to the disclosure of Valeant’s bid and Pershing’s Allergan stake on April 21,

2014, and represents 9% of the maximum theoretical damages that could be

established. ¶169. That such a significant settlement was achieved in a complicated

and challenging case involving novel legal issues and unique risks – and in the face

of highly skilled and determined opposition by Defendant’s Counsel – speaks

volumes about Lead Counsel’s efforts here.

III. THE REQUESTED FEE AWARD IS REASONABLE AND SHOULD BE APPROVED

A. Lead Counsel Are Entitled To An Award Of Attorneys’ Fees From The Common Fund

The Supreme Court has recognized that “a litigant or a lawyer who recovers a

common fund for the benefit of persons other than himself or his client is entitled to a

reasonable attorney’s fee from the fund as a whole.” Boeing Co. v. Van Gemert, 444





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U.S. 472, 478 (1980). Indeed, the Supreme Court has emphasized that private

securities actions, such as the instant Action, are “a most effective weapon” and “an

essential supplement to criminal prosecutions and civil enforcement actions” brought

by the SEC. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 313, 318

(2007). The PSLRA also authorizes courts to award attorneys’ fees and expenses to

counsel for the plaintiff class provided the award does not exceed a reasonable

percentage of the amount of damages paid to the class. 15 U.S.C. § 78u-4(a)(6).

The Ninth Circuit has expressly approved the percentage-of-recovery

approach, which has become the prevailing method for awarding fees in common

fund cases in the Ninth Circuit. See, e.g., Powers v. Eichen, 229 F.3d 1249, 1256

(9th Cir. 2000) (affirming use of percentage-of-the-fund approach); Vizcaino v.

Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002) (affirming use of percentage

method and application of lodestar method as a cross-check); Ellison v. Steven

Madden, Ltd., 2013 WL 12124432, at *8 (C.D. Cal. May 7, 2013) (“use of the

percentage method is the dominant approach in common fund cases”); In re

Omnivision Techs., Inc., 559 F. Supp. 2d 1036, 1046 (N.D. Cal. 2008) (same).

Most courts have found the percentage approach superior in cases with a

common-fund recovery because it parallels the use of percentage-based contingency

fee contracts, which are the norm in private litigation; aligns the lawyers’ interests

with that of the class; and reduces the burden on the court by eliminating the detailed

and time-consuming lodestar analysis. See Vinh Nguyen v. Radient Pharm. Corp.,

2014 WL 1802293, at *9 (C.D. Cal. May 6, 2014) (Carter, J.) (“There are significant

benefits to the percentage approach, including consistency with contingency fee

calculations in the private market, aligning the lawyers’ interests with achieving the

highest award for the class members, and reducing the burden on the courts that a

complex lodestar calculation requires”).





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Rather than engaging in a full-blown lodestar analysis, courts employing the

percentage method generally use a less detailed “lodestar cross-check” on the

reasonableness of the requested fee. See, e.g., Vizcaino, 290 F.3d at 1047; Radient

Pharm., 2014 WL 1802293, at *8-*11 (using percentage method with lodestar cross-

check); In re Am. Apparel, Inc. S'holder Litig., 2014 WL 10212865, at *20 (C.D. Cal.

July 28, 2014) (same).

In any event, in this case, whether assessed under either the percentage-of-

recovery or lodestar approach, the fee request of 21% of the Settlement Fund – which

represents a negative lodestar multiplier of 0.8 – is fair and reasonable.

B. The Requested Attorneys’ Fees Are Reasonable Under the Percentage Method

The requested 21% fee is below the Ninth Circuit’s benchmark for percentage

fee awards in common fund cases and well within the range typically awarded in

comparable cases.

The Ninth Circuit has established 25% as the “benchmark” for percentage fee

awards in common-fund cases, such as this one. See, e.g., Fischel v. Equitable Life

Assurance Soc’y, 307 F.3d 997, 1006 (9th Cir. 2002); Vizcaino, 290 F.3d at 1047-48;

Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1376 (9th Cir. 1993). The 25%

benchmark can “be adjusted upward or downward to account for any unusual

circumstances involved in [the] case,” Paul, Johnson, Alston & Hunt v. Graulty, 886

F.2d 268, 272 (9th Cir. 1989), and, indeed, “in most common fund cases, the award

exceeds that benchmark.” Omnivision, 559 F. Supp. 2d at 1047; accord In re

Heritage Bond Litig., 2005 WL 1594403, at *19 & n.14 (C.D. Cal. June 10, 2005).

The 21% fee requested by Lead Counsel is not only below the standard 25%

benchmark, it is well within the range of percentage fees that have been awarded in

securities class actions and other similar litigation with comparable recoveries in this

Circuit. See, e.g., Vizcaino, 290 F.3d at 1051 (affirming award of 28% of $97 million





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settlement, representing a 3.65 multiplier); In re Washington Mut., Inc. Sec. Litig.,

2011 WL 8190466, at *1 (W.D. Wash. Nov. 4, 2011) (awarding 21% of $208.5 total

million settlement, representing a 1.1 multiplier); In re Apollo Grp. Inc. Sec. Litig.,

2012 WL 1378677, at *7 (D. Ariz. Apr. 20, 2012) (awarding 33.3% of $145 million

settlement, representing a 1.74 multiplier); In re Mercury Interactive Corp. Sec.

Litig., 2011 WL 826797, at *3 (N.D. Cal. Mar. 3, 2011) (awarding 22% of $117.5

million settlement, representing a 3.08 multiplier); In re Brocade Sec. Litig., No. 05-

2042, slip op. at 13 (N.D. Cal. Jan. 26, 2009), ECF No. 496 (Joint Decl. Ex. 10)

(awarding 25% of $160 million settlement, representing a 3.5 multiplier); In re

Broadcom Corp. Sec. Litig., 2005 WL 8153006, at *4-*5 (C.D. Cal. Sept. 12, 2005)

(awarding 25% of $160 million settlement, representing a 1.64 multiplier). The

requested fee is also consistent with fee awards in similarly sized settlements of

securities class actions and other comparable litigation in other circuits.3

3 See, e.g., Woburn Ret. Sys. v. Salix Pharms. Ltd., 2017 WL 3579892, at *5-*7 (S.D.N.Y. Aug. 18, 2017) (awarding 21.2% of $210 million settlement, representing a 3.14 multiplier); In re Genworth Fin. Sec. Litig., 2016 WL 7187290, at *1-*2 (E.D. Va. Sept. 26, 2016) (awarding 28% of $219 million settlement, representing a 1.97 multiplier); NECA-IBEW Health & Welfare Fund v. Goldman, Sachs & Co., 2016 WL 3369534, at *1 (S.D.N.Y. May 2, 2016) (awarding 21% of $272 million settlement, representing a 3.9 multiplier); Schuh v. HCA Holdings Inc., No. 3:11-cv-01033, slip op. at 1 (M.D. Tenn. Apr. 14, 2016), ECF No. 563 (Joint Decl. Ex. 11) (awarding 30% of $215 million settlement); In re Bank of New York Mellon Corp. Forex Transactions Litig., 148 F. Supp. 3d 303, 305 (S.D.N.Y. 2015) (awarding 25% of $180 million settlement, representing a 0.96 multiplier); In re Merck & Co., Inc. Vytorin/Zetia Sec. Litig., 2013 WL 5505744, at *3, *46, *51 (D.N.J. Oct. 1, 2013) (awarding 28% of a $215 million settlement, representing a 1.3 multiplier); Bd. of Trustees of AFTRA Ret. Fund v. JPMorgan Chase Bank, N.A., 2012 WL 2064907, at *1-*3 (S.D.N.Y. June 7, 2012) (awarding 25% of $150 million settlement, representing a 2.86 multiplier); Silverman v. Motorola, Inc., 2012 WL 1597388, at *4 (N.D. Ill. May 7, 2012) (awarding 27.5% of $200 million settlement), aff’d, 739 F.3d 956 (7th Cir. 2013); In re Comverse Tech., Inc., Sec. Litig., 2010 WL 2653354, at *6 (E.D.N.Y. June 24, 2010) (awarding 25% of $225 million settlement, representing a





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C. The Requested Attorneys’ Fees Are Reasonable Under the Lodestar Method

To ensure the reasonableness of a fee awarded under the percentage-of-the-

fund method, Courts in the Ninth Circuit typically cross-check the proposed award

against counsel’s lodestar, although such a cross-check is not required. See In re

Amgen Inc. Sec. Litig., 2016 WL 10571773, at *9 (C.D. Cal. Oct. 25, 2016)

(“Although an analysis of the lodestar is not required for an award of attorneys’ fees

in the Ninth Circuit, a cross-check of the fee request with a lodestar amount can

demonstrate the fee request’s reasonableness.”); HCL Partners Ltd. P’ship v. Leap

Wireless Int’l, Inc., 2010 WL 4156342, at *2 (S.D. Cal. Oct. 15, 2010) (“Courts have

found that a lodestar analysis is not necessary when the requested fee is within the

accepted benchmark.”).

As detailed here and in the Joint Declaration, Lead Counsel exerted a

tremendous amount of effort in advancing this litigation over the past three years in

the face of extremely aggressive and highly skilled defense attorneys. In total,

Plaintiffs’ Counsel4 spent 136,142.60 hours of attorney and other professional

support time prosecuting the Action for the benefit of the Class through January 26,

2.78 multiplier); In re CMS Energy Sec. Litig., 2007 WL 9611274, at *4 (E.D. Mich. Sept. 6, 2007) (awarding 22.5% of $200 million settlement, representing a 2.6 multiplier); In re Williams Sec. Litig., No. 02-cv-72-SPF, slip op. at 2 (N.D. Okla. Feb. 12, 2007), ECF No. 1638 (Joint Decl. Ex. 12) (awarding 25% of $311 million settlement, representing a 1.7 multiplier); In re DaimlerChrysler AG Sec. Litig., No. 00-0993 (KAJ), slip op. at 1 (D. Del. Feb. 5, 2004), ECF No. 971 (Joint Decl. Ex. 13) (awarding 22.5% of $300 million settlement, representing a 4.21 multiplier); In re Deutsche Telekom AG Sec. Litig., No. 00-CV-9475 (NRB), 2005 WL 7984326, at *4 (S.D.N.Y. June 9, 2005) (awarding 28% of $120 million settlement, representing a 3.97 multiplier). 4 “Plaintiffs’ Counsel” includes Lead Counsel and additional counsel for Lead Plaintiff Ohio STRS, Murray, Murphy, Moul + Basil LLP (“MMM+B”).





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2018, the date the Stipulation was executed. ¶194. Plaintiffs’ Counsel’s lodestar,

derived by multiplying the hours spent on the litigation by each attorney and

paraprofessional by their hourly rates in use in 2017, is $65,219,763.25. See id.5

Accordingly, the requested fee of 21% of the Settlement Fund, which equates to

$52,500,000 (before interest), represents a multiplier of 0.8 of the total lodestar. In

other words, the requested fee represents only 80% of the lodestar value of the time

that Plaintiffs’ Counsel dedicated to the Action.

This “negative” or fractional multiplier is well below the range of multipliers

commonly awarded in comparable litigation. Fee awards in class actions with

substantial contingency risks generally represent positive multipliers of counsel’s

lodestar, often ranging from one to four times the lodestar or even higher. See

Vizcaino, 290 F.3d at 1051 n.6 (finding that lodestar multipliers ranging from 1 to 4

are common); Hopkins v. Stryker Sales Corp., 2013 WL 496358, *4 (N.D. Cal. Feb.

6, 2013) (“Multipliers of 1 to 4 are commonly found to be appropriate in complex

class action cases.”). Likewise, a review of the lodestar multipliers in the cases cited

above, all of which involved percentage awards of 21% or higher in comparably large

settlements, reveals that 0.8 is at the very low end of multipliers typically awarded.

Indeed, in cases of this nature, fees representing multiples well above the

lodestar are regularly awarded to reflect the contingency fee risk and other relevant

factors. See Vizcaino, 290 F.3d at 1051 (noting that “courts have routinely enhanced

5 It is well established that it is appropriate to calculate counsel’s lodestar based on current, rather than historical rates, as a method of compensating for the delay in payment and the loss of interest on the funds. See Missouri v. Jenkins, 491 U.S. 274, 284 (1989); In re Washington Pub. Power Supply Sys. Sec. Litig., 19 F.3d 1291, 1305 (9th Cir. 1994) (“WPPSS”). However, because the agreement in principal to settle was reached in late 2017 in this Action and Lead Counsel are including less than one month of 2018 time in their lodestar, they have elected to use 2017 rather than 2018 rates in calculating their lodestar.





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the lodestar to reflect the risk of non-payment in common fund cases” and affirming a

fee representing a 3.65 multiplier) (quoting WPPSS, 19 F.3d at 1300); In re Flag

Telecom Holdings, Ltd. Sec. Litig., 2010 WL 4537550, at *26 (S.D.N.Y. Nov. 8,

2010) (“a positive multiplier is typically applied to the lodestar in recognition of the

risk of the litigation, the complexity of the issues, the contingent nature of the

engagement, the skill of the attorneys, and other factors”); Comverse, 2010 WL

2653354, at *5 (“Where, as here, counsel has litigated a complex case under a

contingency fee arrangement, they are entitled to a fee in excess of the lodestar”).

Here, despite the existence of numerous substantial litigation risks in the case

from the outset, Lead Counsel are seeking a fee that is less than the lodestar value of

their time. Courts have repeatedly recognized that a percentage fee request that is

less than counsel’s lodestar provides strong confirmation for the reasonableness of

the award. See, e.g., Amgen, 2016 WL 10571773, at *9 (“Courts have recognized

that a percentage fee that falls below counsel’s lodestar strongly supports the

reasonableness of the award”); Flag Telecom, 2010 WL 4537550, at *26 (“Lead

Counsel’s request for a percentage fee representing a significant discount from their

lodestar provides additional support for the reasonableness of the fee request.”); In re

Initial Pub. Offering Sec. Litig., 671 F. Supp. 2d 467, 515 (S.D.N.Y. 2009) (finding

“no real danger of overcompensation” given that the requested fee represented a

discount to counsel’s lodestar).

In sum, Lead Counsel’s requested fee award is reasonable, justified and well-

within the range of what courts in this Circuit regularly award in class actions such as

this one, whether calculated as a percentage of the fund or as a cross-check on

counsel’s lodestar. Moreover, as discussed below, each of the factors considered by

courts in the Ninth Circuit also strongly supports a finding that the requested fee is

reasonable.





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IV. ALL OTHER FACTORS CONSIDERED BY NINTH CIRCUIT COURTS SUPPORT APPROVAL OF THE REQUESTED FEE

Courts in this Circuit consider the following factors when determining whether

a fee is fair and reasonable: (1) the results achieved; (2) the risks of litigation; (3) the

skill required and quality of work; (4) the contingent nature of the fee and financial

burden carried by the plaintiffs; (5) awards made in similar cases; (6) the reaction of

the class; and (7) the amount of a lodestar cross-check. See Vizcaino, 290 F.3d at

1048-50; Omnivision, 559 F. Supp. 2d at 1046-48. Application of each of these

factors confirms that the requested 21% fee is fair and reasonable.

A. The Results That Lead Counsel Achieved In The Face Of Significant Risks Support The Requested Fee

i. The Work Performed And Results Achieved

Courts consistently recognize that the settlement achieved is an important

factor to consider in determining an appropriate fee award. See, e.g., Omnivision,

559 F. Supp. 2d at 1046. Here, Lead Counsel succeeded in obtaining a $250 million

cash Settlement for the Class. This achievement was the result of Lead Counsel’s

vigorous prosecution and settlement negotiations in the face of formidable risks.

Lead Counsel also achieved numerous interim successes throughout the

conduct of this case. As noted above and detailed in the Joint Declaration, Lead

Counsel defeated three rounds of motions to dismiss brought by Defendants;

successfully obtained certification of a seller class over Defendants’ vigorous

opposition and then defended that certification win by fending off Defendants’ Rule

23(f) petition to the Ninth Circuit. Based on the enormous effort put into discovery,

Lead Counsel were also able to put together a compelling evidentiary record at

summary judgment – which not only provided the foundation for Plaintiffs’

affirmative summary judgment motion on liability, but also for opposing Defendants’

two cross-motions for summary judgment.





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None of these achievements would have been possible without Lead Counsel’s

dedication and skill. As summarized above and set forth in greater detail in the Joint

Declaration, Lead Counsel extensively developed the evidentiary record by, among

other things, (i) conducting a detailed investigation into the Class’s claims; (ii)

engaging in extensive fact and expert discovery, including taking or defending over

70 depositions which took place across the nation and beyond, analyzing over 1.5

million pages of document discovery, and exchanging opening and rebuttal reports

for fourteen experts; (iii) briefing and arguing over 40 separate discovery motions

before two Court-appointed Special Masters; (iv) consulting extensively with experts

and consultants in the areas of market efficiency, damages, loss causation, mergers

and acquisitions and corporate governance; (v) briefing and arguing (over the course

of four days) cross-summary judgment motions; and (vi) undertaking extensive pre-

trial preparations.

Lead Counsel’s effort was not exclusively spent on mounting a tremendous

offense – as they also were required to protect Plaintiffs from Defendants’ vigorous

litigation strategy. In addition, Lead Counsel engaged in a massive discovery effort

from Plaintiffs, which involved the review and production of over 800,000 pages of

client discovery, the defense of no less than 13 depositions of Plaintiff witnesses and

written responses to 23 interrogatories and 266 requests for admission. ¶¶67, 81, 84.

Put simply, this case required Lead Counsel to devote an enormous amount of

effort to its prosecution and the results achieved, including the $250 million

Settlement recovery, is testament to the merit of that effort.

ii. The Case Faced Serious Risks

Lead Counsel prosecuted this Action on a fully contingent basis and assumed

numerous substantial litigation risks that might have resulted in no recovery at all

(and thus no compensation whatsoever to counsel). Notwithstanding these risks,

Lead Counsel dedicated many millions of dollars of their attorneys’ and other staff





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members’ time to litigating this Action as forcefully as possible for the Class, and

incurred over $6 million in litigation expenses in prosecuting the claims for the Class.

These risks are another important factor that strongly support the reasonableness of

the requested fee. See, e.g., Heritage Bond, 2005 WL 1594389, at *14 (“The risks

assumed by Class Counsel, particularly the risk of non-payment or reimbursement of

expenses, is a factor in determining counsel’s proper fee award.”); Omnivision, 559

F. Supp. 2d at 1047; WPPSS, 19 F.3d at 1299-301.

As discussed above and detailed in the Joint Declaration, there was a very real

risk in this Action that Plaintiffs and the Class might recover nothing. For example,

even with all of their successes, Plaintiffs and Lead Counsel still ultimately faced a

significant chance that they could lose on one or more of the serious defenses

mounted by Defendants. For example, Plaintiffs faced the difficult task of

convincing a jury at trial that Pershing traded on material non-public information

“related to” a tender offer, and that it was “reasonably foreseeable” to Valeant that its

tip to Pershing would “result in a violation of” the applicable law. ¶¶157-163. As the

Court will recall, Defendants were also planning to argue vehemently that their

conduct was legal because it was approved by numerous top attorneys and through

the SEC’s inaction in prosecuting Defendants. ¶119. Indeed, far from prosecuting

Defendants, the SEC fined Allergan, Valeant’s target, for its conduct in defending

against the takeover. Defendants’ strategies on these fronts could very well have

found their mark with the jury.

Absent the Settlement, Plaintiffs would also have to confront significant

challenges in proving loss causation and damages at trial. ¶¶163-169. In that regard,

Defendants were adamant that they caused no damages to the Class because Class

Members suffered no out-of-pocket damages when they sold Allergan stock

contemporaneously with Pershing’s trades. In fact, according to Defendants, many

Class Members actually benefitted from Defendants’ conduct – profiting from the





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rise in Allergan’s stock price that was occasioned by Pershing’s secret buying spree.

Indeed, Defendants would have plainly sought to persuade the jury that Plaintiffs

were simply upset because they felt they should have made even more money from

their sales of Allergan stock. ¶164. It might have worked.

Moreover, for purposes of reviewing the reasonableness of a fee award, the

Court should consider not just the risks of continued litigation, but all of the risks that

the litigation presented from the outset – that is, from the time that counsel undertook

the representation. See Fischel, 307 F.3d at 1009 (“there is no dispute that a court

should consider risk at the ‘outset’ of litigation,” which the Ninth Circuit has

determined to be the point in time “when an attorney determines that there is merit to

the client’s claim and elects to pursue the claim on the client’s behalf”); accord

Florin v. Nationsbank of Georgia, N.A., 34 F.3d 560, 565 (7th Cir. 1994) (“A court

must assess the riskiness of the litigation by measuring the probability of success of

this type of case at the outset of the litigation”).

When Lead Counsel first undertook to prosecute the Action on behalf of

Plaintiffs and the Class, this case, of course, presented substantially more risks than it

does today. In addition to the risks outlined above, Lead Counsel faced at the outset

of the litigation the risks that: (a) the Court might have found that there was no

private cause of action under Rule 14e-3; (b) Valeant and Pershing might be found to

be “co-offering persons” and, thus, not subject to Rule 14e-3’s restrictions on trading

in advance of the tender offer; and (c) a factfinder might find that Valeant had not

taken “substantial steps” towards a tender offer during the Class Period. Related

risks included the standard to be applied in determining whether “substantial steps”

had occurred (including the role of the offering person’s “subjective intent” in

determining this issue); and the risk that Plaintiffs’ sales of Allergan common stock

during the Class Period might not have been considered to be “contemporaneous”





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with Pershing’s trades, particularly in light of Pershing’s use of options rather than

purchases of common stock to acquire their position.

That Lead Counsel faced and overcame many of these very significant risks

during the course of the litigation, through their extensive efforts and skilled

lawyering, strongly supports the requested fee. The Settlement avoids the substantial

remaining risks, and obtains a substantial recovery for the Class.

B. The Skill Required And Quality Of Lead Counsel’s Work Performed Support The Requested Fee

Another factor to consider in determining what fee to award is the skill

required and quality of work performed. See Heritage Bond, 2005 WL 1594389, at

*12 (“The experience of counsel is also a factor in determining the appropriate fee

award.”). “The ‘prosecution and management of a complex national class action

requires unique legal skills and abilities.’” Omnivision, 559 F. Supp. 2d at 1047.

Here, respectfully, Lead Counsel prosecuted the case vigorously, provided high

quality legal services, and achieved great results for the Class. Likewise, Lead

Counsel exhibited considerable skill and dedication in steering Lead Plaintiffs – and

the Class – through a hotly contested class certification process. Indeed, the attorneys

at Lead Counsel’s firms are among the most experienced and skilled practitioners in

the securities litigation field, as discussed in the firm resumes attached to the Joint

Declaration as Exhibits 3A-4 and 3B-5. Many of the issues litigated by Lead

Counsel were novel or, at least infrequently litigated, and thus required extensive

fresh research, argument and thought by Lead Counsel’s attorneys. The effort and

skill of Lead Counsel in successfully pushing this litigation forward past multiple

motions to dismiss and through highly contested discovery was essential to achieving

a meaningful settlement against Defendants. In addition, Lead Counsel’s reputation

as experienced and competent counsel in complex class action cases, who were both





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willing and able to litigate the case to trial if necessary, greatly facilitated Lead

Counsel’s ability to deliver the $250 million recovery for the Class.

The quality and vigor of opposing counsel are also important in evaluating the

services rendered by Lead Counsel. See, e.g., Barbosa v. Cargill Meat Solutions

Corp., 297 F.R.D. 431, 449 (E.D. Cal. 2013). Here, Defendants were represented by

an army of very experienced attorneys practicing at the top of their fields from well-

respected nationwide firms including Kirkland & Ellis LLP and Kramer Levin

Natalis & Frankel LLP, who represented the Pershing Defendants, and Hueston

Hennigan LLP and Sullivan & Cromwell LLP, who represented the Valeant

Defendants. ¶202. The attorneys were not only highly skilled and supported by

enormous financial resources, but they also adopted an extremely aggressive

litigation strategy that required Lead Counsel to vigorously litigate every conceivable

procedural, discovery and substantive dispute in the Action. ¶¶10-11. Nevertheless,

Lead Counsel were able to persuade Defendants to settle the case on terms highly

favorable to the Class.

C. The Contingent Nature Of The Fee And The Financial Burden Carried By Lead Counsel Support The Requested Fee

The Ninth Circuit has confirmed that a determination of a fair and reasonable

fee must include consideration of the contingent nature of the fee and the obstacles

surmounted in obtaining the settlement.6 It is an established practice in the private

legal market to reward attorneys for taking on the serious risk of non-payment by

permitting a fee award that reflects a premium to normal hourly billing rates. See In

re Nuvelo, Inc. Sec. Litig., 2011 WL 2650592, at *2 (N.D. Cal. July 6, 2011) (citing

6 WPPSS, 19 F.3d at 1299; see In re Dynamic Random Access Memory (DRAM) Antitrust Litig., 2007 WL 2416513, at *1 (N.D. Cal. Aug. 16, 2007); see also Omnivision, 559 F. Supp. 2d at 1047.





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WPPSS, 19 F.3d at 1299). “This practice encourages the legal profession to assume

such a risk and promotes competent representation for plaintiffs who could not

otherwise hire an attorney.” Id.

Here, Lead Counsel received no compensation during the three years of

litigation. During that time, Lead Counsel invested over 136,000 hours for a total

lodestar of over $65.2 million, and incurred expenses of over $6 million in

prosecuting the case. See ¶¶194, 208. Additional further work in connection with the

Settlement and claims administration will still be required. Any fee award has

always been at risk, and completely contingent on the result achieved and on this

Court’s discretion in awarding fees and expenses. Unlike defense counsel – who

typically receive payment on a timely basis whether they win or lose – Lead Counsel

sustained the entire risk that they would have to fund the expenses of this Action and

that, unless Lead Counsel succeeded, they would not be entitled to any compensation

whatsoever. Accordingly, the contingent nature of the representation, and the burden

carried by Lead Counsel, support the requested fee.

D. The Requested Fee Is Consistent With Or Less Than Awards Made In Similar Cases On A Percentage or Lodestar Multiplier Basis

Lead Counsel’s fee request is well within the range of what courts in this

Circuit commonly award in complex securities class actions. To avoid repetition,

Lead Counsel will refer to Part II.B, supra, which explains that the 21% fee request is

below the Ninth Circuit’s 25% “benchmark” as well as fee percentages regularly

awarded in comparable settlements; and Part II.C, which explains that the 21% fee

requested represents a negative multiplier of 0.8 on Plaintiffs’ Counsel’s lodestar,

which is well below the typical lodestar multiplier in cases of this nature.

E. The Reaction Of The Class To Date Supports The Requested Fee

The reaction of the class to a proposed settlement and fee request is also a

relevant factor in approving fees. See Knight v. Red Door Salons, Inc., 2009 WL





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248367, at *6 (N.D. Cal. Feb. 2, 2009); Omnivision, 559 F. Supp. 2d at 1048. Here,

all of the Plaintiffs, including Ohio STRS and Iowa PERS, which are both

sophisticated institutional investor Lead Plaintiffs, have approved the fee request.

See Neville Decl. ¶11; Schochenmaier Decl. ¶11; Johnson Decl. ¶8. The Court-

approved Summary Settlement Notice was published in The Wall Street Journal, The

New York Times, and the Financial Times and released via PR Newswire on April 10,

2018. See id. ¶9. Information regarding the Settlement was also made available

through a toll-free telephone number established for the Settlement, see id. ¶10, and

posted on the case website by the Claims Administrator and on Lead Counsel’s

websites. See id. ¶11; see also Joint Decl. ¶177. In addition, in accordance with the

Court’s Preliminary Approval Order, all reasonable steps were taken to ensure that

the Court-approved Settlement Notice was mailed to those Class Members who

originally received the Class Notice, as well as any new potential Class Members that

were identified in a timely fashion by brokers and nominees. See Fraga Aff. ¶¶3-8.

The Settlement Notice informed Class Members that Lead Counsel would seek

fees in an amount not to exceed 25% of the Settlement Amount, and reimbursement

of Litigation Expenses in an amount not to exceed $8.5 million. See Fraga Aff. Ex.

A, at ¶¶5, 63. The Settlement Notice further advises Class Members of, among other

things, their right to object to Lead Counsel’s request for attorneys’ fees and

Litigation Expenses. While the time to object to the Fee and Expense Application

does not expire until May 9, 2018, to date, no objections have been received. Joint

Decl. ¶188. Should any objections be received, Lead Counsel will address them in

their reply brief to be filed by May 23, 2018.7

7 Lead Counsel are informed by counsel that filed an initial complaint in this case that they intend to seek substantial attorneys’ fees for (a) filing an initial complaint, (b) publishing notice of that filing, (c) seeking to have their clients appointed as lead plaintiff, (d) offering one of their clients as a potential class representative, and





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V. PLAINTIFFS’ COUNSEL’S LITIGATION EXPENSES ARE REASONABLE

Lead Counsel also request reimbursement of Litigation Expenses incurred by

Plaintiffs’ Counsel in the amount of $6,205,108.12 incurred in prosecuting and

resolving the Action on behalf of the Class. Attorneys who create a common fund for

the benefit of a class are entitled to be reimbursed for their out-of-pocket expenses

incurred in creating the fund so long as the submitted expenses are reasonable,

necessary and directly related to the prosecution of the action. See Omnivision, 559

F. Supp. 2d at 1048 (“Attorneys may recover their reasonable expenses that would

typically be billed to paying clients in non-contingency matters.”).

From the outset, Lead Counsel were aware that they might not recover any of

these expenses or, at the very least, would not recover anything until the Action was

successfully resolved. Thus, Lead Counsel were motivated to, and did, take

significant steps to minimize expenses wherever practicable without jeopardizing the

vigorous and efficient prosecution of the Action. See Joint Decl. ¶209.

The expenses for which Lead Counsel seek reimbursement are detailed in the

accompanying lodestar and expense declarations, attached as Exhibit 3 to the Joint

(e) performing one discrete research assignment. Lead Counsel informed these counsel that they would be offered appropriate compensation for any specifically approved work (e.g., items (d) and (e)), with any such fees deducted from any fee awarded to Lead Counsel. ¶¶225-227. However, as for items (a) through (c) above, the law is clear that counsel are not entitled to compensation for filing an initial complaint, publishing notice or seeking appointment as lead. See In re Cendant Corp. Sec. Litig., 404 F.3d 173, 196-97 (3d Cir. 2005); In re Heritage Bond Litig., 2005 WL 1594389, at *18 (C.D. Cal. June 10, 2005) (following Cendant and denying fees to non-lead counsel for filing a complaint and “efforts to have its client appointed lead plaintiff in the action and to have itself be appointed lead counsel”). Lead Plaintiffs deliberately and carefully considered the appropriateness of the 21% fee sought by Lead Counsel, and will oppose any separate request for fees that they have not approved.





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Declaration, setting forth the specific categories of expenses incurred and the amount.

The types of expenses for which Lead Counsel seek reimbursement were necessarily

incurred in litigation and are routinely charged to classes in contingent litigation and

clients billed by the hour. These include expenses associated with, among other

things, service of process, travel, experts and consultants, and mediation. See, e.g.,

Vincent, 2013 WL 621865, at *5 (granting reimbursement of costs and expenses for

“three experts and the mediator, photocopying and mailing expenses, travel expenses,

and other reasonable litigation related expenses”); Red Door Salons, 2009 WL

248367, at *7 (granting reimbursement because “[a]ttorneys routinely bill clients for

all of these expenses”).

Notably, Plaintiffs’ Counsel applied various “caps” to their litigation expenses,

which will benefit the Class. For example, regardless of the actual amounts paid,

Lead Counsel capped their airfare at coach rates, capped lodging charges at different

rates depending on whether they were located in “high cost” or “low cost” cities (as

defined by the IRS), and capped all working meal expenses. Any amounts in excess

of these “caps” constitute out of pocket expenses that Lead Counsel did in fact pay –

but for which reimbursement will not be sought.

Relatedly, Lead Counsel heeded the Court’s comments regarding expenses

during the March 5, 2018 preliminary approval hearing, and can each independently

confirm without reservation that none of their expenses for which reimbursement is

sought include any “administration” or “standard overhead” costs – or anything

remotely similar. Indeed, Lead Counsel are not requesting any reimbursement for

internal copying/Xeroxing, telephone or faxing charges – even though such requests

are common.

The largest component of counsel’s expenses, $3,477,996.77, over 56% of the

expense amount, is for the costs of experts and consultants, including the retention of

experts on damages, loss causation, and market efficiency in securities class actions,





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in the fields of merger and acquisitions, corporate governance and securities law and

practice, and on proxy contests and their use in mergers and acquisitions. ¶¶211-212.

Lead Counsel worked extensively with many of these experts throughout the

litigation.8 Each of Plaintiffs’ six testifying experts prepared opening and rebuttal

reports and sat for deposition, as well as assisted Lead Counsel in review of

discovery and in preparation for Lead Counsel’s depositions of Defendants’ experts.

While the work of these experts did not come cheap, Lead Counsel were required to

retain the best possible experts they could in order to maintain a level playing field

with the deep-pocketed defendants who had hired seven highly credentialed experts.

Lead Counsel have already paid the fees and expenses of all of these expert expenses,

whose charges were not contingent on the outcome of this litigation.

Another large component of the expenses, $773,8569.62 or approximately

12.5% of the total expense amount, related to document review and production and

litigation support. ¶218. Lead Counsel had to retain the services of vendors to,

among other things, (i) maintain the electronic database through which the more than

2 million pages of documents produced by the parties and third parties were

reviewed; (ii) have documents processed so that they would be in searchable format;

(iii) convert and upload hard documents so that they would be electronically

searchable; and (iv) produce documents to Defendants in response to their document

requests on the Lead Plaintiffs. Id. Lead Counsel also retained a trial consulting firm

to conduct the mock trial, analyze the results of the deliberations of mock jurors, and

assist in trial preparation and if needed, the presenting of Plaintiffs’ case at trial.

¶216.

8 Notably, Lead Counsel had to add one rebuttal expert in the middle of the case – Steven Halperin, a top securities law practitioner in Canada – to address Defendants’ designation of an affirmative expert on Canadian law.





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The Settlement Notice informed potential Class Members that Lead Counsel

would apply for reimbursement of Litigation Expenses in an amount not to exceed

$8.5 million, which may include the reasonable costs and expenses of Plaintiffs

directly related to their representation of the Settlement Class. See Fraga Aff. Exhibit

A ¶¶5, 63. The total amount of expenses requested by Lead Counsel for

reimbursement is $6,333,235.10, which includes $128,126.98 in proposed PSLRA

awards for reasonable expenses incurred by Plaintiffs as described below. This

amount is significantly less than the $8.5 million maximum amount stated in the

Settlement Notice.

VI. PLAINTIFFS SHOULD BE AWARDED THEIR REASONABLE COSTS AND EXPENSES UNDER 15 U.S.C. §78u-4(A)(4)

In connection with their request for reimbursement of Litigation Expenses,

Lead Counsel also seek reimbursement of $128,126.98 in expenses incurred by

Plaintiffs directly related to their representation of the Class. The PSLRA

specifically provides that an “award of reasonable costs and expenses (including lost

wages) directly relating to the representation of the class” may be made to “any

representative party serving on behalf of a class.” 15 U.S.C. § 78u-4(a)(4).

Consistent with that statute, courts regularly reimburse lead plaintiffs and class

representatives in PSLRA actions for their reasonable costs and expenses, including

the time devoted to the Action. See, e.g., In re Bank of Am. Corp. Sec. Litig., 772

F.3d 125, 133 (2d Cir. 2014) (affirming award of over $450,000 to representative

plaintiffs for time spent by their employees on the action); Flag Telecom, 2010 WL

4537550, at *31 (approving award of $100,000 to Lead Plaintiff for time spent on the

litigation); In re Marsh & McLennan Cos. Sec. Litig., 2009 WL 5178546, at *21

(S.D.N.Y. Dec. 23, 2009) (awarding over $214,000 to lead plaintiffs to compensate

them “for their reasonable costs and expenses incurred in managing this litigation and

representing the Class”).





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Here, Plaintiffs request reimbursement of a total of $128,126.98 is consistent

with the PSLRA and based on the value of time devoted to the Action by employees

of Ohio STRS and Iowa PERS and by Mr. Johnson, including, for example, time

spent communicating with Lead Counsel, reviewing pleadings and briefs, assisting in

the production of documents and other discovery responses, preparing for depositions

and being deposed, and consulting during the course of settlement negotiations. See

Neville Decl. ¶¶5-7, 15; Schochenmaier Decl. ¶¶5-7, 15; Johnson Decl. ¶¶3-5, 11.

The time that Plaintiffs devoted to this Action was extremely substantial and was

increased as a result of Defendants’ aggressive approach to the litigation. By way of

example, nine employees of Ohio STRS alone were deposed by counsel for

Defendants. See Neville Decl. ¶6. In total, employees of Ohio STRS spent a total of

563 hours participating in the litigation, which represented a cost to Ohio STRS of

$70,860.00, and Ohio STRS also incurred out-of-pocket expenses for travel, lodging

and meals in the amount of $3,979.78, for a total of $74,839.78. Neville Decl. ¶17.

Employees of Iowa PERS devoted a total of 200 hours, which represented a cost to

Iowa PERS of $17,887.20 (Schochenmaier Decl. ¶17); and Mr. Johnson dedicated

118 hours, which are valued at $35,400 in total (Johnson Decl. ¶11).

The awards sought by Plaintiffs are reasonable and justified under the PSLRA

based on the active involvement of Plaintiffs in the Action, and should be granted.

VII. CONCLUSION

Lead Counsel respectfully request that the Court award attorneys’ fees in the

amount of 21% of the Settlement Fund, reimbursement of Plaintiffs’ Counsel’s

Litigation Expenses in the amount of $6,333,235.10, which includes proposed awards

to Plaintiffs under the PSLRA in the total amount of $128,126.98.





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DATED: April 25, 2018 Respectfully submitted,

BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP

RICHARD D. GLUCK (Bar No. 151675) [email protected] 12481 High Bluff Drive, Suite 300 San Diego, CA 92130 Telephone: (858) 793-0070 Facsimile: (858) 793-0323

-and-

/s/ Mark Lebovitch MARK LEBOVITCH (Pro Hac Vice) [email protected] JEREMY P. ROBINSON (Pro Hac Vice) [email protected] MICHAEL D. BLATCHLEY (Pro Hac Vice) [email protected] EDWARD G. TIMLIN (Pro Hac Vice) [email protected] 1251 Avenue of the Americas, 44th Floor New York, NY 10020 Telephone: (212) 554-1400 Facsimile: (212) 554-1444

KESSLER TOPAZ MELTZER & CHECK, LLP ELI R. GREENSTEIN (Bar No. 217945) [email protected] STACEY M. KAPLAN (Bar No. 241989) [email protected] PAUL A. BREUCOP (Bar No. 278807) [email protected] RUPA NATH COOK (Bar No. 296130) [email protected] One Sansome Street, Suite 1850 San Francisco, CA 94104





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Telephone: (415) 400-3000 Facsimile: (415) 400-3001

-and-

LEE RUDY (Pro Hac Vice) [email protected] JOSH D’ANCONA (Pro Hac Vice) [email protected] JUSTIN O. RELIFORD (Pro Hac Vice) [email protected] 280 King of Prussia Road Radnor, PA 19087 Telephone: (610) 667-7706 Facsimile: (610) 667-7056

Lead Counsel for Class Representatives and the Class

MURRAY MURPHY MOUL BASIL LLP

BRIAN K. MURPHY (Pro Hac Vice) [email protected] JOSEPH F. MURRAY (Pro Hac Vice) [email protected] 1114 Dublin Road Columbus, OH 43215 Telephone: (614) 488-0400 Facsimile: (614) 488-0401

Special Counsel for the Ohio Attorney General


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